Is the Tennessee beef cattle herd growing?

Rusty Evans

Andrew P. Griffith shares some information with us this week on the Tennessee beef cattle herd:

The Cattle Inventory Report was recently released. It was a much-anticipated report since the July 1 inventory report was not released in 2013 due to budgetary issues. Most of the interest related to the report surrounded the beef heifer replacement numbers.

Most analysts who follow the cattle industry closely were certain the all-cattle-and-calves inventory was going to decline nationwide compared to a year ago. The all-cattle-and-calves inventory declined 1.76 percent to 87.7 million head of cattle which is the lowest cattle inventory since 1951.

Since 1996, cattle inventory has increased in only two years, which were 2005 (0.4 percent) and 2006 (0.1 percent). Though total inventory declined, improved grazing conditions and a reduction in heifer slaughter the last six months of 2013 indicated potential replacement heifer retention in the beef cow herd. Nationwide, beef heifer replacement inventory increased

1.68 percent compared to a year ago and totaled 5.47 million head.

A little closer to home, Tennessee all-cattle-and-calves inventory declined 3.83 percent to 1.76 million head which is a much larger reduction in inventory than the national average.

Similarly, beef cows that calved declined 5.26 percent to 864,000 head while heifers for beef cow replacement declined 10.3 percent to 130,000 head. The cattle inventory report paints a bleak picture for the Tennessee cattle industry as the total cattle inventory in Tennessee had a decline that exceeded the national average decline by more than 2 percent. Similarly, when compared to the changes in national inventory from a year ago, Tennessee beef cows that calved declined right at 2.5 percent more than the national average while the difference in beef heifer replacements was nearly a 12 percent difference.

Many folks may be asking by now, why are producers in other parts of the nation trying to increase the herd size while Tennessee inventory continues to contract? There is not one single answer to this question. Part of the answer has to do with the fact than many fences have been taken out the past four or five years to make way for tractors and planters to get in the field and plant corn, soybeans or some other crop. To a lesser degree, the increase in urbanization and the average age of cattle producers in Tennessee which has resulted in some of those producers slowing down and producing fewer head of cattle has contributed to the decline in inventory.

However, the Tennessee cattle herd was culled pretty hard in Tennessee in 2012 as producers marketed older and less productive cows. This culling process likely resulted in a younger cow herd. Therefore, the expectation of fewer cow marketings in the next couple of years is likely to result in an increase in Tennessee inventory numbers over that time period.

The younger herd age and lack of expansion when prices are high may not be a bad thing from an economics standpoint. When we consider the price of calves at this point, marketing cattle or selling a large number of the heifers appears favorable based on the prices received. The key strategy for anyone trading a good is to buy low and sell high and to avoid buying high and selling low. The current cattle market is definitely in a sell-high position. If we look at it from the standpoint of someone who does not own cattle today but is considering entering the business then that person would be buying into the industry when prices are high. That does not mean they will be selling when prices are low, but it does make it more difficult to be profitable when buying in at high prices or when forgoing the sale of animals when animals are high for established producers.

The cow-calf business can and will be a profitable business the next few years. However, the decisions made today will impact the profitability and long-term viability of an operation.

One other note for tobacco farmers: The last 2014 GAP meeting will be held on April 30 at 10:30 a.m. at the Robertson County Extension office in Springfield. If you have not attended a GAP training yet you will want to make plans to attend this one. Call Rusty at 931-648-5725 if you need more information.

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Is the Tennessee beef cattle herd growing?

Andrew P. Griffith shares some information with us this week on the Tennessee beef cattle herd: